Pertamina pressing ahead with C. Java FSRU plan

State-owned oil and gas company PT Pertamina is pressing ahead with its plan to develop the Central Java Floating Storage and Regasification Unit (FSRU), although the government has yet to decide on the fate of the US$300-400 million project.

Director General of Oil and Gas at the Ministry of Energy and Mineral Resources Evita Legowo said that her office has yet to decide on whether to approve or delay the Central Java FSRU project. ?The ministry is still going to discuss the project with related parties. We?ll discuss what?s the best,? she said over the weekend.

According to the plan, the Central Java FSRU will not only supply gas for the power plants of PLN. ?(Gas) demand in Central Java does not only come from PLN. We?re still conducting a study to see whether the FSRU is needed or not. The study is targeted to be completed next week,? Evita said.

Senior Vice President at Pertamina, Nanang Untung said the company wants to complete the construction of the FSRU project in the second quarter of 2013 as planned as the facility will become the source of gas for the Transjava pipeline being developed by Pertamina subsidiary PT Pertamina Gas.

?From the perspective of Pertamina, we still expect the project to proceed as planned to support the Trans Java (gas pipeline), which is a strategic infrastructure to support gas distribution and security across Java,? he said.

PLN, as the largest gas consumer, however, for now does not need gas from the planned FSRU, PLN?s Head of Fuel and Gas Division Suryadi Mardjoeki said the company has already obtained sufficient gas supply from various sources, namely the Kepodang Field owned by Petronas Carigali at a volume of 116 mmscfd, Gundih Field owned by PT Sumber Petrindo Perkasa at a volume of 50 mmscfd, and Cepu Block owned by Mobil Cepu Limited at a volume of 200 mmscfd.

Nevertheless, Suryadi expects that the construction of the Trans Java pipeline can be completed as scheduled, even if the planned Central Java FSRU project is delayed. He said that the gas pipeline is a very important facility to help ensure gas supply in Java.

The Trans Java pipeline includes a 140 km pipeline connecting the PLN?s Muara Tawar combined cycle plant in Bekasi and Cirebon. The pipeline will then be connected further with a 255 km pipeline from Cirebon to Semarang, Central Java, and connecting finally with a 271 km pipeline stretching to Gresik in East Java.

?The (gas) pipeline will not only distribute gas from the FSRU. Under the grand plan, all gas will enter the pipeline as open access,? Suryadi explained.

Earlier, President Director of Pertagas, Gunung Sardjono Hadi, said that the Central Java FSRU is part of the three FSRU projects stipulated in a Presidential Instruction. But the Central Java FSRU has later been excluded due to uncertainty in the production of gas at the Cepu Block. This is despite the fact that the construction of the FSRU is urgently needed by industries as developing gas pipeline is not feasible given the very distant location of the alternative gas sources.

?The industries in Central Java will not develop if the Central Java FSRU is not built. We?ve met with industries in Central Java, and they have no objection to pay gas equal to LNG price as long as the supply can be fulfilled. We demand this project to be reactivated,? Gunung said.

According to Gunung, if the government can approve the wish of Petragas, the Pertamina subsidiary can realize the project very soon. The capacity of the Central Java FSRU will be between 1.5 and 3 million metric tons per year , with investment of about $300-400 million. To ensure the gas supply, Pertagas has been in talks with Qatar and other overseas producers. (*)